Globalization of Real Estate Industry Harvard Case Solution & Analysis

Globalization of Real Estate Industry Case solution

Introduction

Investors and Builders around the world have always viewed the area of real estate as a local phenomenon. Moreover, investors and the builders have always believed upon their local knowledge to find the best location. Moreover, real estate is basically a physically unmovable product and it is the least tradable product however, most of the investors sell and buy real estate internationally and domestically(Bardhan, 2006).

The local tradability and the local knowledge was the key reason due to which the global economic integration and the phenomenon of globalization had undertaken the real estate industry in the year 1990(Conner, 2006). Over the past decade, the real estate finance firms, service firms, consulting firms, brokerage firms, investors and the builders have extended their domestic operations across the national borders to a worldwide base.

Discussion

The real estate industry has been rapidly transforming since the last decade and there are several factors which have led to the transformation of the real estate industry. The nexus between location and local has weakened and the geographic reach has also been extended as a result of the technological changes. There has been a rapid creation of real estate opportunities for the real estate firms across the world as a result of the opening of the formerly closed and the developing economies of the world.
Looking at the opportunities from the perspective of the US, the real estate firms have been facilitated further to participate in the growing opportunities in the largest real estate emerging markets of the world as a result of property ownership regulations, taxation and liberalization of the business licensing(Geurts, 1996).

On the other hand, if we talk about the financial investment side associated with the real estate industry, then it can been seen that the development and the secularization of the financial instruments around the world has led to more trad ability and liquidity for both real estate debt and real estate equity(Hoesli, 2004).Globalization Case Solution

Most of the foreign investors are able to easily invest in these real estate assets.They also have the opportunity to add foreign real estate financial instruments and real estate physical assets to their entire portfolios in order to fulfill their diversification objectives.The pricing of the real estate assets has also been impacted greatly to a large extent by the increased integration and merging of the global financial markets.

Moreover, if we talk about the demand side associated with the real estate industry then, it has also been seen that most of the large consumers of the real estate industry are also going global. Most of the service sector firms, suppliers, distributors, multinational firms along with their manufacturing plants are also leaving global footprints..................

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